Study: Income inequality is rising fast in Orange County

Construction at Rancho Mission Viejo in Orange County. Places with higher housing prices and slower growth tend to have more income disparity among residents. (Mark Boster / Los Angeles Times)

Income inequality is rising all over the country. But it's rising faster in some places than others -- almost nowhere faster than Orange County.

That's according to a report this week from real estate website Trulia, which crunched income figures over the last 22 years and found that a household in the 90th percentile of income in Orange County in 2012 earned 11.7 times as much as a household in the 10th percentile. That's up from 7.5 times as much in 1990.

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Only three metro areas in the country -- San Francisco, hedge-fund capital Fairfield County, Conn., and San Jose -- saw the disparity grow faster in that time.

Why?

Trulia chief economist and study author Jed Kolko was reluctant to ascribe reasons for the pace of growing inequality -- too many variables among different places, he said. But he noted a strong link between income inequality and housing affordability.

Places with higher housing prices and slower growth tend to be less equal. One potential explanation, he wrote:

"Expensive housing pushes out many low and middle-income households and, in turn, richer residents bid up home prices and rents. At the same time, to compensate for high housing costs, many expensive big cities have policies or programs -- like rent control or inclusionary zoning -- that preserve or build some housing for lower-income residents."

And the middle gets squeezed out. In an interview, Kolko was careful to point out he's not claiming housing policy causes economic inequality. Still, he said, there is at least some correlation between high-cost markets and big income gaps.

It's not universal. After Fairfield County, San Francisco, New York and Boston, the list of the Top 10 most-unequal metros includes poorer regions like Detroit, Miami and Springfield, Mass.

Of the five Southland markets Trulia included in its study, inequality remains higher in Los Angeles and San Diego than in Orange County, despite the OC's growth of late. It has grown slowly in the more-affordable Inland Empire. And the most equal place in Southern California? Ventura County.

"It's actually one of the least unequal places in the country," Kolko said. "Even though inequality and unaffordability tend to go hand in hand, there are some metros that are quite expensive but less unequal. You just don't have as much income diversity."